Fuller Family Holdings v. Northern Trust
Decision Date | 13 February 2007 |
Docket Number | No. 1-06-1533.,1-06-1533. |
Citation | 863 N.E.2d 743,309 Ill.Dec. 111 |
Parties | FULLER FAMILY HOLDINGS, LLC, Plaintiff-Appellant, v. The NORTHERN TRUST COMPANY, Defendant-Appellee. |
Court | United States Appellate Court of Illinois |
The plaintiff, Fuller Family Holdings, LLC, (Fuller Holdings), as successor in interest to the William A. Fuller Indenture of Trust (Fuller Trust or the trust), appeals the dismissal of its action against the defendant, The Northern Trust Company (Northern), asserting claims for (1) breach of fiduciary duty, and (2) spoliation of evidence. For the reasons that follow, we reverse and remand for further proceedings.
The allegations in the corrected complaint, the affidavit in support of the motion to dismiss, and their attached exhibits reveal the following relevant facts, which we must accept as true in reviewing the circuit court's dismissal pursuant to section 2-619 of the Code of Civil Procedure (the Code) (735 ILCS 5/2-619 (West 2004)).
On February 28, 1918, William A. Fuller created the Fuller Trust and named Northern as trustee. Northern acted as trustee of the Fuller Trust from 1918 until 2002. The primary asset of the trust was a parcel of real property located at 30 North LaSalle Street in Chicago, Illinois, known as the Fuller Parcel.
In 1968, a plan was proposed to redevelop the land at 30 North LaSalle Street and to construct a high-rise building on the Fuller Parcel and adjacent properties, including a parcel of land owned by a LaSalle National Bank land trust (LaSalle Trust), known as the Civic Center Parcel. With approval from the Fuller Trust beneficiaries and the circuit court, Northern cancelled the existing ground lease on the Fuller Parcel and entered into a new lease with the LaSalle Trust, referred to as the Fuller Lease. The Fuller Lease contained several provisions concerning the construction of a new high-rise building and provided for the payment of three types of rent to the Fuller Trust: minimum ground rent, additional ground rent, and percentage rent. Additional ground rent would be due if the value of the land exceeded a certain amount after periodic reappraisals. Percentage rent would be due if the tenant's yearly income from the property exceeded the minimum ground rent and additional ground rent by a specified amount.
Northern also entered into a supplemental agreement with the LaSalle Trust and the owner of a third adjacent parcel to jointly construct a new building on all of their properties. Pursuant to this agreement, a new high-rise office building, known as the 30 North LaSalle building, was constructed on the Fuller Parcel, the Civic Center Parcel, and the adjacent parcel.
In or prior to 1972, the beneficial interest in the LaSalle Trust was assigned to the 30 North LaSalle Street Corporation. In addition, the LaSalle Trust's leasehold interest in the Fuller Lease was assigned to the American National Bank & Trust Company, as trustee under Trust No. 28985, (American National Trust), which became the new tenant/developer of the property. The American National Trust experienced difficulty securing mortgage financing for the new building and requested that Northern amend the Fuller Lease to facilitate such financing. After obtaining approval from the circuit court, Northern amended the Fuller Lease in August 1972 to accommodate the American National Trust in securing financing from its lender, Prudential Insurance Company (Prudential).
Pursuant to the Fuller Lease amendments, the American National Trust was named the lessee, the amount of minimum ground rent was increased, and the amounts of additional ground rent and percentage rent were modified. Also, Northern agreed to subordinate the trust's right to collect the additional ground and percentage rents to the payments due from the American National Trust to Prudential on the leasehold mortgages. In particular, paragraph 13 of the August 23, 1972 lease amendment added a new section 3.4 to the lease, which provided as follows:
In addition, paragraph 14 of the August 23, 1972 lease amendment added a new section 3.5 to the lease, which provided as follows:
In consideration for these amendments to the Fuller Lease, the American National Trust and the 30 North LaSalle Street Corporation executed a guarantee in favor of the Fuller Trust (guarantee). Although the guarantee, dated September 14, 1972, is not included in the record on appeal, a draft guarantee, dated September 12, 1972, was attached as an exhibit to both the corrected complaint and the motion to dismiss. The parties agree that the executed guarantee has been lost and that its terms are identical to or are substantially identical to those contained in the draft guarantee. For purposes of reviewing the dismissal of the corrected complaint under section 2-619, we accept as true the allegation that the substantive terms of the guarantee are identical to the substantive terms of the draft guarantee. We note however, that the draft guarantee listed American National Bank and Trust Company as the sole guarantor.
The draft guarantee promised payment of the additional ground and percentage rents "during any period when the same may not be payable by the tenant under the Fuller Lease because of the subordination thereof to the Original Leasehold Mortgages". The draft guarantee provided that it would continue during the entire term of the Fuller Lease as to percentage rent and until January 1, 2000, as to additional ground rent. The draft guarantee also provided that it would survive the assignment, sale or conveyance of the interest of the guarantor in the Fuller Lease and would not be released, diminished or affected by any such assignment, sale or conveyance. In addition, the draft guarantee stated that the obligations of the guarantor were independent of its obligations as tenant under the Fuller Lease.
As further consideration for the 1972 amendments to the Fuller Lease, the LaSalle Trust executed an assignment of rents, assigning to the Fuller Trust its right to receive minimum ground rent due from the American National Trust under its lease of the Civic Center Parcel. The LaSalle Trust also executed a mortgage on the Civic Center Parcel in favor of the Fuller Trust, which secured performance under (1) the guarantee of the payment of additional ground and percentage rents under the Fuller Lease and the 1972 amendments, (2) the assignment of rents under the Civic Center Lease, and (3) the obligation of the American National Trust to pay minimum ground rent under the Fuller Lease. Prudential ultimately provided financing for the project and became the leasehold mortgagee.
The American National Trust subsequently defaulted on its leasehold mortgage payments to Prudential, and in 1978, Prudential accepted an assignment of the Fuller Lease in lieu of foreclosure of the leasehold mortgages and became the tenant of the 30 North LaSalle building. Pursuant to the terms of the Fuller Lease amendments, after Prudential accepted the assignment in lieu of foreclosure, Prudential's obligation to pay additional ground rent was abated until January 1, 2000, and the obligation to pay percentage rent was terminated.
In 1992 and 1993, in response to inquiries by certain Fuller Trust beneficiaries about the payment of the additional ground and percentage rents on the 30 North LaSalle building, Northern sent three letters referring to and explaining the Fuller Lease amendments relating to these rental payments. Included as attachments to...
To continue reading
Request your trial-
Siena at Old Orchard Condo. Ass'n v. Siena at Old Orchard, L.L.C.
...84, 88, 236 Ill.Dec. 482, 707 N.E.2d 609 (1999) ); Fuller Family Holdings, LLC v. Northern Trust Co. , 371 Ill.App.3d 605, 614, 309 Ill.Dec. 111, 863 N.E.2d 743 (2007). It is a contract and is therefore governed by contract law. Farm Credit Bank of St. Louis v. Whitlock , 144 Ill.2d 440, 44......
-
C.O.A.L., Inc. v. Dana Hotel, LLC
...3d 84, 88, 236 Ill.Dec. 482, 707 N.E.2d 609 (1999) ); Fuller Family Holdings, LLC v. Northern Trust Co. , 371 Ill. App. 3d 605, 614, 309 Ill.Dec. 111, 863 N.E.2d 743 (2007). It is a contract and is therefore governed by contract law. Farm Credit Bank of St. Louis v. Whitlock , 144 Ill. 2d 4......
-
Garland v. Sybaris Club Int'l, Inc.
...or whether dismissal is proper as a matter of law. Fuller Family Holdings, LLC. v. Northern Trust Co., 371 Ill.App.3d 605, 613, 309 Ill.Dec. 111, 863 N.E.2d 743 (2007). When ruling on a motion to dismiss, a reviewing court must construe the pleadings and supporting documents in the light mo......
-
Motorola Solutions, Inc. v. Zurich Ins. Co.
...84, 88, 236 Ill.Dec. 482, 707 N.E.2d 609 (1999) ); Fuller Family Holdings, LLC v. Northern Trust Co., 371 Ill.App.3d 605, 614, 309 Ill.Dec. 111, 863 N.E.2d 743 (2007). It is a contract and is therefore governed by contract law. Farm Credit Bank of St. Louis v. Whitlock, 144 Ill.2d 440, 447,......